Air Source Heat Pumps: How much do they cost to install and operate?

A guide to installation costs, finance options, government grants, and how much you could be saving on your energy bills

As with almost any significant investment into your home, the cost of upgrading your heating system is more complex than a single number. Your heating system is remarkably specific to your home and the necessary requirements for any installation vary hugely. Things such as the size of your home, its current heating system, and how well insulated it is all play a huge part.

The main things that need to be considered when working out the cost of a heat pump installation are the cost of installation, maintenance and the operational cost.

The average cost of a heat pump installation for a 3-bed semi-detached house would typically cost between £5,500 – £7,000. 

In order to maximise efficiency, the installation of an ASHP heating system isn’t simply a case of swapping your old boiler for an air source heat pump as they work quite differently. An air source heat pump installation that’s able to operate at nearly 400% efficiency most commonly requires a whole heating system upgrade.

Primarily, this is because ASHP systems work at a lower flow temperature than traditional boiler systems. Radiators may therefore need to be replaced with ones that have larger surface areas to let the heat generated by the ASHP heat your home and hot water as efficiently as possible. Older radiators will still work with a new ASHP, but the system efficiency may be significantly reduced.

Installations typically take between 2-5 days, depending on the size of house, number of radiators that need replacing, and whether any existing pipework needs to be replaced.

Taking into account the £7,500 Boiler Upgrade Scheme (BUS) grant, a complete heat pump system, matched perfectly to your requirements as part of our bespoke system design service and fully installed can cost as little as £5,500-£7,000 for the average 3-bed family home.

Many customers find this a reasonable level of investment for a dependable, robust, and eco-friendly heating system.

You can find the BUS eligibility criteria here, but we’ll handle all the paperwork and applications so it won’t be something you’ll have to worry about!

This cost of a heat pump investment can also be split into monthly repayments when opting for a financing arrangement – subject to approval from our lending partner.

Here’s a typical illustrative chart of what finance repayments can look like:

The per-unit cost to run an air source heat pump can be as little as zero if the heat pump is being powered by renewable, on-property sources such as solar panels. But, when working with grid-supply energy, the actual costs are difficult to pin down because they depend so much on how the heating system is used, how well it’s been installed, the resultant efficiency of the system, and the heat loss profile of the home.

Generally, however, you could make roughly a £240 saving on your yearly energy bills if replacing an old G-rated gas boiler – and could see comparable energy bills if replacing a new A-rated gas boiler. If you’re replacing old electric storage heaters, however, you could be saving a whopping £1,000 per year on your energy bills.

A key thing to note is that heat pump efficiency fluctuates throughout the year, so you need to look at the average for the whole year to get an accurate figure for cost – and while cost savings wherever possible are wonderful, it shouldn’t be forgotten that you save almost two tonnes of CO2 emissions every year by switching to an air source heat pump. For context, that’s the equivalent of not driving a car for a year – and the equivalent carbon benefit of growing 100 trees every year.

With the advent of smart electricity meters for homes, we’re now seeing more and more energy firms offer energy tariffs specifically for owners of heat pumps. These tariffs offer the electricity for your heat pump at a significantly reduced rate to your standard electricity unit price – in some cases, as much as 50% cheaper.

So heat pump tariffs coupled with high-efficiency systems are set to reduce your energy bills, possibly by as much as half!

Not only does a well-installed heat pump system make your home more comfortable to live in, but opting to invest in one while government grants such as the Boiler Upgrade Scheme are still available is a great way to get ahead of the curve and future-proof your home.

You could also make the leap to completely self-sufficient energy by investing in solar panels and domestic batteries alongside your heat pump upgrade. This not only moves you away from having to ever pay energy bills again, but often adds significantly to the value of your property simply because it’s far more desirable to buy a property where you’ll never have to worry about energy bills or a cold winter.

The average effective operational life of an air source heat pump is at least 25 years – after which they usually become slightly less effective, though they can still continue to operate properly for a number of years after. Compared to the average efficient operational life of a gas boiler of 10 years, the investment is seen by many as the perfect balance of clean, green energy, comfortable set-it-and-forget-it heat, and long-term value-building for their property.

If you’re considering making the leap to clean, green energy with an air source heat pump, make sure your investment gets the maximum possible return by working with real experts. We’ve been installing high-efficiency systems for over 20 years and do everything possible to keep you warm and comfortable all year round.

Get in touch if you have any questions, or for a free, no-obligation quote.

If you want to understand more about air source heat pumps, and how to calculate energy costs for yourself, and what exactly a kilowatt or a kilowatt-hour is, read on!

We’ve found that customers who understand energy conversions tend to find it easier to understand their home’s energy consumption and therefore estimate operational costs based on their own past use – as well as change their habits to save on energy bills.

To begin with, we have to quickly learn about energy units.

Watts (W) is the unit used to measure energy. Every appliance in your home that needs energy to operate has to consume a certain amount of energy to operate properly.

So let’s take an electric radiator as an example – one with variable heat settings. And let’s say you turn it on to a low-medium setting of 1 kilowatt (kW). Because it doesn’t immediately heat up the room, and because the room itself loses heat through walls, ceilings, and windows, you need to leave the radiator turned on for long enough to heat the room adequately.

If you leave the radiator on for 1 hour at the 1kW setting, it will have used 1 kilowatt-hour (kWh) of energy – in this case, 1kWh of electricity. If you turn the radiator up to a higher setting of 1.5kW and leave it on for 2 hours, you’ll have used 3kWh of electricity, and so on.

The sum here is a relatively simple: watts ✕ time in operation.

This unit of kWh is used for almost all domestic energy measurements because it’s a really convenient way of comparing the energy used in a home across all appliances (everything from your lights to your phones, laptops, white goods, and even your boiler). In the case of heating, it’s also a handy way of comparing different sources of heating because how much heat your home needs will stay the same, regardless of what’s used to heat it!

One thing to be mindful of, however, is that the kW rating of a heating appliance (like a gas boiler) doesn’t necessarily mean that’s how much energy it will always use – more on this shortly.

Let’s focus now on heat. How much hot water your home needs depends on how frequently you run hot taps and have hot showers – but this tends to correlate quite neatly with how many occupants are in the house. On average, it’s around 1.6kWh of energy for hot water per person, per day.

Heating your home itself is where most of the energy goes. 

How much energy your home actually needs to heat it depends on a few things but, primarily, how big it is (assuming you’re heating the whole property equally), how warm you want it, how well it’s insulated (also known as its “heat loss profile”), and whether it’s terraced, semi-detached, or detached.

This heat loss profile of your home is one of the most variable things – but also one of the most easily upgradeable. Heat loss happens primarily through external-facing walls, windows, and your roof. The “thermal mass” of the materials used to build your home also factors into this calculation. This essentially means how well a material absorbs, holds on to, and releases heat.

For example, brick walls shared with a neighbour in a terrace are unlikely to lose a great deal of heat because it’s likely that your neighbour is also heating their side of the wall. Windows don’t really hold on to any heat, but double (or, better yet, triple) glazed windows do reduce how much heat escapes your home.

Crucially, the lower the heat loss profile of your home, the less energy you need to use to heat it – simply because it’s not losing heat as quickly.

On average, a 2-3 bed, poorly-insulated Victorian terrace home can require around 6,000 kWh of heat per year for hot water and central heating.

A 3-4 bed semi-detached family home with 4-5 occupants, on the other hand, can averagely use around 12,000 kWh of heat per year. 

This is the heat output required to continue living in the home as you currently are. You can usually find this figure by looking at heating bills over the last year – look specifically for a figure giving the “total kWh”.

A gas boiler can only ever be 100% efficient – and this is impossible in real world applications because heat loss happens on so many components around the system. Real-world efficiency for gas boilers varies wildly between 65%-95% efficiency. But let’s just assume that your boiler is working at 100% efficiency.

In order to get, for example, the 12,000kWh of heat required for hot water and to heat your 3-4 bed semi-detached home, you theoretically need to use 12,000kWh of gas – so working out the cost is quite straightforward because you find out how much your energy provider charges for 1kWh of gas, and then multiply that figure by 12,000 to find out how much you’re likely to pay over the whole year.

Heat pumps, however, can work at more than 100% efficiency because they’re largely moving heat from one place (the outside) to another (inside). In fact, heat pumps installed by experts averagely work at between 300-400% efficiency when averaged over the whole year. This means that, for every 10kWh of heat required to heat your water and home, the heat pump only requires around 3-4kWh of electricity.

But they can also work at much higher efficiencies during the warmer months – so your hot water becomes even cheaper. 

While this is great for your pocket and the environment, it does make calculating the cost a bit more difficult because the cost depends on the efficiency of the system and the efficiency of the system depends on things like how well it’s been installed, the size and number of radiators, how the heat pump is operated, and the heat loss profile of your home.

The cost, of course, also depends on the current unit price of electricity on your tariff – which is something we’ve seen vary wildly since 2020. Importantly, however, we believe that the huge spike in electricity prices during the energy crisis of 2021 and 2022 aren’t a useful metric to project future electricity costs.

The energy crisis showed that, while consumption of electricity remained essentially static, it was only the price that skyrocketed. Not only has this electricity price almost come down to pre-crisis levels, but we’re seeing an increase in energy companies offering tariffs specifically created for heat pumps – which offer electricity prices at a much lower rate to power your ASHP.

Now, while we can’t know that electricity prices are going to come down further, we do know for sure that gas prices are going to start coming up as the world transitions away from fossil fuels.